1. What key piece of legislation was passed in response to corporate accounting scandals by
Enron, WorldCom, and others?
2. Which of the following does not represent a major provision of the Sarbanes-Oxley Act?
3. Under the provisions of the Sarbanes-Oxley Act, corporate executives:
4. Under the provisions of the Sarbanes-Oxley Act, auditors must do which of the following?
5. Fraudulent reporting by management could include:
6. The Sarbanes-Oxley Act (SOX) mandates which of the following?
7. Occupational fraud:
8. Which of the following is NOT a design feature of effective internal controls?
9. A framework for designing an internal control system is provided by the:
10. The components of internal control do not directly include:
11. Separation of duties refers to:
12. Which employees have an impact on the operation and effectiveness of internal controls?
13. Which of the following best describes the goal of internal controls?
14. What is the concept behind separation of duties in establishing internal controls?
15. Which employees are the ones who must take final responsibility for the establishment
and success of internal controls?
16. The act of collusion refers to:
17. Which of the following is not an example of preventive controls?
19. Keeping supplies in a locked room with access allowed only to authorized personnel is an
example of which preventive control?
20. Giving only management the right to make purchases over a certain amount is an example
of which preventive control?
21. Providing employees with appropriate guidance to ensure they have the knowledge
necessary to carry out their job duties is an example of which preventive control?
22. Having management periodically determine whether the amount of physical assets of the
company match the accounting records is an example of which detective control?
23. Checking actual outcome of individuals or processes against their expected outcome is an
example of which detective control?
24. Cash may not include:
25. Common examples of cash equivalents include all of the following except:
26. Which of the following is considered cash for financial reporting purposes?
27. Which of the following would NOT represent good controls over cash receipts?
28. Which of the following would NOT be recorded as a cash sale?
29. McGregor Company allows customers to pay with credit cards. The credit card company
charges McGregor 3% of the sale. When a customer uses a credit card to pay McGregor $200
for services provided, McGregor would:
30. A customer purchased a $2,000 item at ApplianceWorld, paying with a credit card.
ApplianceWorld is charged a 2% fee by the credit card company. When recording this sale,
ApplianceWorld would:
31. Which of the following would NOT represent good controls over cash disbursements?
32. Which of the following would NOT represent good controls over cash disbursements?
33. Which of the following would not be considered good internal control for cash receipts?
34. Which of the following would NOT need to be accounted for in a bank reconciliation?
35. On May 31, Money Corporation’s Cash account showed a balance of $10,000 before the
bank reconciliation was prepared. After examining the May bank statement and items
included with it, the company’s accountant found the following items:
What is the amount of cash that should be reported in the company’s balance sheet as of May
31?
36. Cash transactions recorded by the bank but not yet recorded by the company include all of
the following except
37. The following information was taken from the bank reconciliation for Mooner Sooner Inc.
at the end of 2012:
Bank balance: $8,000
Checks outstanding: $5,800
Note collected by the bank: $1,500
Service fee: $20
Deposits outstanding: $4,000
NSF check (bad check) returned for $300
What is the correct cash balance that should be reported in Mooner Sooner’s balance sheet at
the end of 2012?
38. Cash transactions that have been recorded by the company but not the bank include:
39. Which of the following is NOT a reason why a bank reconciliation is necessary?
40. Which of the following is correct with respect to a bank reconciliation?
41. After preparing a bank reconciliation, the collection of a note by the bank on a company’s
behalf would be recorded with:
42. After preparing a bank reconciliation, the service fee charged by the bank would be
recorded with:
43. After preparing a bank reconciliation, a check outstanding for the payment of advertising
would be recorded with:
44. The following data were obtained from the bank statement and from the process of
reconciling it:
Bank service charges = $20
Deposit outstanding = $150
Interest earned on the bank account = $10
Checks outstanding = $400
Which items should be deducted from and added to the bank balance in completing the
reconciliation?
45. The balance in the Colt Company’s Cash account on August 31 was $19,700, before the
bank reconciliation was prepared. After examining the August bank statement and items
included with it, the company’s accountant found:
What is the amount of cash that should be reported in the balance sheet as of August 31?
46. The balance shown in the August bank statement of Colt Company was $23,200. After
examining the August bank statement and items included with it, the company’s accountant
found:
What is the amount of cash that should be reported in the balance sheet as of August 31?
47. When preparing a bank reconciliation, a deposit outstanding would be:
48. After preparing the bank reconciliation, an NSF check would result in which of the
following when recording the adjustment to the company’s cash balance?
49. A minor amount of cash kept on hand to pay for small purchases is referred to as a:
50. Which of the following is NOT involved in the replenishment of the petty cash fund?